Should I Put My Signature On A Signature Loan?

Published: March 5th, 2022

Time-To-Read: 5 Minutes

Signature Loan Pic

Business / Finance Tips

(Photo Credit: Ron Lach)

Imagine securing a loan without collateral because your word is all the collateral you need.

There's always a certain level of risk involved when issuing and receiving a loan. But putting your signature on the loan is more than just letters on a piece of paper. It's your word of honor. So why should you consider a signature loan? Consider these lucrative perks?

  1. Quick and, in some cases, same-day access to non-collateral cash.
  2. Access to higher cash amounts compared to other personal loans.
  3. Your word is your bond.

signing for a signature loan
(Photo Credit: Pexels)

Demystifying Signature Loans

Signature loans are a favorite source of loans because they do not require you to have a sterling credit score or put up any collateral. Instead of physical collateral, Signature Loans rely solely on the word and the borrower's integrity to pay the loan back. This good faith loan, as its also commonly known, depends on the borrower's signature as the necessary collateral and thus is highly reserved for unique individuals at financial institutions.

Because there is a great deal of risk involved with Signature Loans, they can come with considerably high-interest rates. A determining factor in issuing a Signature Loan, a lender may do an extensive credit background check. The better your personal credit score, the better your chances of receiving this highly lucrative loan.

Another determining factor is proof of an income that can pay back the loan. It is also within the lender's boundaries to require a co-signer before giving the green light to a Signature Loan. It is paramount to note that the co-signer is not responsible for providing the initial payments but will be called upon if the person receiving the loan defaults.

signing for a signature loan
(Photo Credit: Pexels)

The Final Verdict

We hope this article helps in your decision on whether or not to pursue a signature loan. To help you make up your mind, either way, let's recap the essential signature loan points:

  1. Signature loans come in many forms, including peer-to-peer loans. The standard signature loans rate is between 7 to 8%. Expect an extensive background check. Signature loans don't come with collateral needs.

If you're wondering, LoansUnder36, CashUSA.com, and Monevo are but a few of the top Signature Loans entities.

So Magical Naturally Blogs Writers

Dane Terrell is the senior writer, webmaster, and assistant editor at So Magical Naturally.


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